TSLA - As Q3 earnings season revs into high gear here's what to expect
2023-10-17 06:18:04 ET
As the third-quarter earnings season kicks into high gear after banks were off to a strong start, most experts believe companies will beat expectations, given the low bar set by analysts in the backdrop of still-high interest rates and slowing demand.
"I am seeing plenty of caution in outlooks ahead of this earnings season and the bar seems to be set quite low," said Investing Group Leader Fear & Greed Trader .
LSEG's Refinitiv expects overall Q3 earnings for S&P 500 ( SP500 ) companies to increase 1.3% Y/Y . While this is a relatively small growth, it would mark the first increase after three quarters of flat or declining profits.
"Growth expectations for 2023 are 2.3%, the lowest since 2020," said analyst Tajinder Dhillon, noting that Q3 is expected to be a small contributor while Q4 will likely see a growth rate of 10.8%.
On the other hand, analysts tracked by Bloomberg Intelligence are expecting S&P 500 companies' Q3 earnings to dip 0.8% Y/Y, while Q4 will see a 6.2% rebound.
Sector watch
Refinitiv's Dhillon expects the Industrials and Consumer Staples sectors to continue their streak of positive Y/Y earnings growth. Sectors expected to post Q3 earnings decline include Materials, Healthcare and Real Estate. Energy will likely see weaker earnings, on account of more difficult Y/Y comparisons.
This week will see earnings reports from big names including Tesla ( TSLA ) and Netflix ( NFLX ). Goldman Sachs ( GS ), Bank of America ( BAC ) and Johnson & Johnson ( JNJ ) will report later in the session.
To note, the S&P 500 ( SP500 ) is around 5% lower than its late-July highs, although the index is still 14% higher YTD.
More on Q3 earnings season
- The Long Bull Market To Come
- Earnings week ahead: Tesla, AT&T, Netflix and more
- Most crowded longs and shorts going into earnings season
- Q3 Earnings Snapshot: Banks Navigate Growth Amid Rising Rates
- Q3 Earnings: Where Street Estimates Are Too High And Who Should Miss
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As Q3 earnings season revs into high gear, here's what to expect